FX:Copper futures decline as global growth concerns weigh
Forexpros - Copper futures retreated on Monday, as sentiment was weighed by fears high oil prices would hurt the global economic recovery as well as ongoing concerns over the euro zone’s debt crisis.
On the Comex division of the New York Mercantile Exchange, copper futures for May delivery traded at USD3.839 a pound during European morning trade, shedding 0.81%.
It earlier fell by as much as 0.95% to trade at a session low USD3.837 a pound.
Crude oil prices traded close to USD109 a barrel in New York, while Brent oil rose above USD124 in London, fuelling concerns that the economic recoveries in the U.S. and Europe could get derailed and potentially hurt Asian growth.
The world economy is “not out of the danger zone” amid fragile financial systems, high public and private debt and rising oil prices, International Monetary Fund Managing Director Christine Lagarde said in a statement after a weekend meeting of finance ministers from the Group of 20 nations in Mexico.
Wall Street lender Citigroup said in a report published over the weekend that it expects the pace of economic recovery seen in the final months of 2011 to "lose momentum in the near term."
The investment bank cited concerns over an economic contraction in Europe, a slowdown in China and weaker core retail-sales momentum in the U.S. as factors.
Copper is sensitive to the global economic outlook because of its widespread uses in construction and manufacturing.
Prices came under further pressure after a weekend meeting of the Group of 20 finance ministers and central bankers failed to make progress on increasing the size of the International Monetary Fund’s lending capacity.
The G-20 postponed a decision on a global bailout package to address the debt crisis in the euro zone and said any decision on outside help will be conditional upon on European governments increasing the size of their firewall in the next two months.
Markets were also jittery as Germany’s parliament was preparing to vote later Monday on a EUR130 billion bailout package for Greece, which was agreed upon by euro zone finance ministers last week.
Europe as a region is second in global demand for the industrial metal. Prices have tracked investor sentiment toward the euro zone’s debt crisis in recent months.
Elsewhere on the Comex, gold for April delivery fell 0.5% to trade at USD1,767.55 a troy ounce, while silver for May delivery dropped 0.6% to trade at USD35.20 a troy ounce.
